Judge Affirms Web Royalty Ruling

Aug 3, 2001 - Judge Berle Schiller, am Eastern Pennsyvania U.S. District Court judge, ruled on August 1 that radio stations simulcasting their signal online must pay royalties to musicians, stressing the legal notion that copyright laws apply to cyberspace.

This court decision affirms the U.S. Copyright Office's December 11, 2000 rule that states provides that radio broadcasters are not exempt from copyright royalties to recording artists and producers when they stream their audio on the Internet. In March, seven national radio station owners and the National Association of Broadcasters (NAB) filed a lawsuit against the U.S. Copyright Office after the agency made its ruling. The Copyright Office cites that the royalties are required to comply with the Digital Millennium Copyright Act of 1998.

Broadcasters expect that this ruling will severly hinder the cost of online operations. Many stations ceased online streaming when the ruling was first made. Unfortuantely, the Recording Industry Association of America (RIAA), while pleased with the Court's ruling, has still not disclsoed what the fees will be, only that the fees will be retroactive.

On a separate issue, the American Federation of Television and Radio Announcers announced an agreement in October 2000 that requires any AFTRA member to receive a compensation of 300% his session fee for any production played online. This compensation covers a period of one year. An additional 300% payment is due to the talent to renew the usage period for an additional nine months.

Some radio stations have made arrangements with streaming providers to circumvent these rulings. Some stations have also used ad insertion system to cover the AFTRA-affected spots, but this does not address the U.S. Copyright Office/RIAA issue.